Pensions and Kafka

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Put it this way: the most sensible policy proposal on the subject is so complicated that no one understands what it will do.

That proposal came in the form of an initiative by Ted Costa, best known as the original proponent of the 2003 recall of Gov. Gray Davis.

Costa's proposal gets the big things right. It argues for preserving defined benefit -- that is, pensions -- instead of replacing them with less secure 401k accounts, as others on the right propose.

Costa also argues for extending the benefits of public pensions to private workers as well -- a progressive policy that will expand retirement security and end the "pension envy" that is one reason for the backlash against public pensions.

No other proposal -- from left or right -- includes these important things. But Costa's proposal is unworkable for two reasons:

First, it's too complicated, with so many provisions and strangely written rules that the Legislative Analyst's Office, which was required to assess it, threw up its hands.

"This complex measure has many provisions that are unclear.... Complicating our efforts to provide a fiscal estimate are the significant legal challenges that would face various provisions of this measure, including, but not limited to, likely claims that the measure would impair pension and other contracts with current and past public employees. Given all of these uncertainties, we are informing you that, in our opinion, a reasonable estimate of the net impact of this proposed initiative cannot be prepared..."

Second, and even worse, Costa's proposal took the form of an initiative. Making policy by initiative is a scary prospect in California -- because once voters do something by initiative, it's very hard to fix errors.

Of course, hoping for legislation in this area is to hope in vain. Gov. Brown is supposed to come forward soon with major changes.

But Democrats seem unwilling to tackle the problems of pensions -- from the lack of retirement security for most workers to the massive unfunded obligations of public pensions -- because their supporters in the labor movement want to protect the status quo.

So we're stuck. Pension reform should come from the legislature, which won't reform pensions. And the best idea for fixing pensions comes via initiative, which won't work as a method of reform.